Northvolt, a Swedish-based battery maker, filed for bankruptcy in its home country as rising debts defeated one of Europe’s best chances at penetrating the battery market. This isn’t too much of a surprise for investors tracking the company, as it filed for bankruptcy in the U.S. in November 2024.
This latest filing means trouble for European electric vehicle (EV) makers, which were hoping Northvolt would help reduce reliance on Chinese battery companies. Porsche and Volkswagen (VWAGY) CEO Oliver Blume said Europe still needs a battery maker despite the Northvolt bankruptcy filing. However, Porsche began searching for new battery contracts when it became apparent that bankruptcy was on the horizon.
How Can Northvolt Survive Bankruptcy?
Northvolt hopes investors will step forward to provide it with the funds it needs to continue operations. That might be a tall order, considering its debt of $8 billion and estimates that it needs $1.2 billion to continue operations. Unless funding materializes, a court-appointed trustee will sell assets and settle outstanding debts as part of the bankruptcy.
It’s not as if Northvolt doesn’t have big names behind it. Investors in the company include Volkswagen with a 21% stake, Goldman Sachs (GS) with a 19% stake, and 4 to 1 Investments with $578 million invested in the company. However, it doesn’t appear that these investors are interested in providing Northvolt with further funding.
What Are Better Battery Stock Investments?
Investors seeking investments in battery companies have quite a few to choose from. Honeywell International (HON), Enphase Energy (ENPH), Rio Tinto (RIO), Enovix (ENVX), and EnerSys (ENS) are all options traders might consider. Of them, RIO and ENVX offer the best potential with Strong Buy ratings and potential 32.95% and 195.5% upsides, respectively. HON, ENPH, and ENS are still solid options with Moderate Buy ratings and high upside potential.
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